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Liechtenstein’s Parliament has approved the “Blockchain Act,” which aims to set a comprehensive regulatory framework to enhance the nation’s crypto economy. One of Europe’s smallest but richest nations, Liechtenstein, passed the “Token and Trustworthy Technology Service Providers Act” (TVTG in German) act which will come into action from January 1, 2020.
Several small European countries have been adopting blockchain and cryptocurrencies and providing the crypto-friendly environment to attract blockchain firms to operate and flourish in the region. Small nations like Estonia and Luxembourg have already been working on developing a regulatory framework and planning to utilize cryptocurrency as a base for their economy. However, with the new TVTG act, Liechtenstein will become the first European country to have appropriate rules and regulations for blockchain and crypto firms to operate.
Moreover, the official press release states that the new law doesn’t compromise existing civil laws that protect customers and their assets. Along with that, an extensive security measurement and constant supervision on the various firms will be established to oversee their operations. Several security exercises will also be conducted to combat money laundering by making service providers subject to anti money laundering (AML) and combating the financing of terrorism (CFT) rules.
Liechtenstein’s Prime Minister Adrian Hasler stated:
“With the TVTG, an essential element of the government’s financial market strategy will be implemented and Liechtenstein will be positioned as an innovative and legally secure location for providers in the token economy.”
The country is developing a clear road map for companies issuing digital securities, and proper regulation of tokenizing various assets is the main point of focus of the bill. While speaking to German new outlet, BTC Echo, the CEO of Bitcoin Suisse (Liechtenstein) Mauro Casellini said: “The TVTG not only creates legal certainty for all market participants but also heralds a new era, the token economy.”
Another expert, Thomas Nägele, says that the Blockchain Act of Liechtenstein is one of its kinds in Europe as it not only regulates token transfers but also complies with civil laws. Explaining the main idea behind the the law, he said that it is the supposed ‘Token Container Model’ within which “the token serves as a container for rights of all kinds, regardless of whether it is stock, real estate or license rights.”
The TVTG bill is also known as the Blockchain Act which covers blockchain technology under the term “TT systems” or “transaction systems based on trustworthy technologies,” as defined by Liechtenstein lawmakers.